Webinar Presentation

August 2, 2016

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WEBINAR | August 2, 2016

SIMON HENRY

International Carbon Reduction Offset Alliance (ICROA)

ALLIE GOLDSTEIN

Forest Trends’ Ecosystem Marketplace

Webinar Hosts

Report Sponsors – Thank you!

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IMPETUS AND METHODOLOGY: Buying In uses CDP data to get a rare glimpse

of demand for carbon offsets – from the buyers themselves

What the CDP data is…• More than 1,800 companies disclosing

scope 1, 2, and 3 emissions

• Disclosures on emissions reductions

targets and strategies – and the money

invested to achieve them

• Annual reporting on carbon offset

purchases including:

• number of tonnes purchased;

• project type;

• carbon standard used;

• whether the purchase was

motivated by regulation;

• and (in some cases) the offset

project name

• EM analysis is on data from 2013,

2014, and 2015 disclosures (on the

previous year’s activities)

And what it isn’t…• Only public CDP disclosures are

included in this dataset

• Data on 2015 emissions and offset

purchases is not available yet

• No information available through CDP

on offset prices

• No write-in for the motivation for offset

purchases beyond voluntary versus

compliance

• Not a comprehensive picture of

voluntary or compliance offset

demand

CDP data is collected on behalf of

822 institutional investors with

$95 trillion in assets

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OFFSETING AROUND THE WORLD: 248 companies reporting to CDP offset a

portion of their emissions

NUMBER OF COMPANIES PUBLICLY DISCLOSING TO CDP IN 2015, BY REGION AND ENGAGEMENT WITH OFFSETTING

Notes: Based on 1,836 companies’ public disclosures to CDP in 2015. Companies were reporting on 2014 data; 1,896 companies total publicly disclosed

to CDP in 2015 but 60 companies whose reporting periods fell mostly outside of 2014 were excluded from this report’s analysis.

Data source: CDP public disclosure, reporting year 2015.

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OFFSETTING IS COMMON: Collectively, companies reporting to CDP purchased

39.8 MtCO2e and originated another 102.4 MtCO2e

MARKET SNAPSHOT: NUMBER AND PERCENTAGE OF REPORTING COMPANIES THAT ENGAGE IN OFFSETTING AND NUMBER

OF OFFSETS THEY PURCHASE OR ORIGINATE

Notes: Based on 39.8 MtCO2 e in offset purchases by 248 unique buyers in 2014 as well as 102.3 MtCO2 e in offset origination by 79 unique companies.

“All scopes” refers to emissions in Scopes 1, 2, and 3. See Figure 7 on p. 15 for more detail.

Data source: CDP public disclosure, reporting year 2015.

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WHY BUY?: Voluntary offsetters come from sectors that rely on a positive

relationship with consumers – or see high climate risks on the horizon

NUMBER OF REPORTING COMPANIES BY BUSINESS SECTOR AND ENGAGEMENT WITH OFFSETTING

Notes: Based

on 1,724

disclosures

associated with

a business

sector. The

sectors listed

are a slightly

consolidated

version of the

“industry group”

reported to

CDP, with

combinations

made at the

discretion of the

author.

Data source:

CDP public

disclosure,

reporting year

2015

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WHO’S WHO?: 197 companies – many of them household names –

reported voluntary offset purchases (another 53 bought for compliance)

Top 15 voluntary buyers by

volume, 2012-2014:1. General Motors

2. Barclays

3. Delta Air Lines

4. PG&E

5. Marks & Spencer

6. Microsoft

7. Allianz SE

8. Australia and New Zealand

Banking Group

9. Deutsche Bank

10. Interface

11. National Australia Bank

12. Credit Suisse

13. Qantas Airways

14. Bank of Montreal

15. Deutsche Post AGPhoto source: Detroit Free Press

General Motors pioneered new methodologies for carbon

offsets on college campuses – and bought the tonnes

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SCOPING IT OUT

How does offsetting fit into companies’

overall emissions reductions strategies?

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TOTAL SCOPE 1, 2,

AND 3 EMISSIONS AND

TOTAL EMISSIONS

REDUCTIONS IN 2014,

FROM COMPANIES

REPORTING TO CDP

Notes: Based on 5.2 billion

tonnes of scope 1 emissions

reported by 1,718 companies;

1.2 billion tonnes of scope 2

emissions reported by 1,729

companies, and 18.2 billion

tonnes of scope 3 emissions

reported by 1,426 companies

(not all companies reported

emissions across all scopes).

Data source: CDP public

disclosure, reporting year 2015.

Scope 3 = the

emissions

“elephant in the

room”

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Offset buyers

implemented these

direct emissions

reduction strategies

at a higher rate than

other companies

Zooming in…

Offsetting is buying

into the problem,

not out of it.

PERCENTAGE OF REPORTING

COMPANIES ENGAGING IN

EMISSIONS REDUCTIONS

ACTIVITIES >>

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CDP disclosers reported an emissions liability

of nearly 25 billion tonnes in 2014 – about

three-quarters of which (18 billion tonnes)

were attributed to Scope 3 emissions.

Offsets are a way to

address Scope 3

emissions today.

BREAKDOWN OF SOURCES OF SCOPE 3 EMISSIONS, FROM

COMPANIES REPORTING TO CDP

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TONNE BY TONNE

Does offsetting make a dent?

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SCALE OF THE TYPICAL VOLUNTARY OFFSET BUYER’S EMISSIONS AND EMISSIONS REDUCTIONS, ALL SCOPES, 2014

Notes: Based on median emissions and emissions reductions to get an idea of the typical voluntary and compliance offset buyer. Numbers are rounded to

the nearest 1,000.

Data source: CDP public disclosure, reporting year 2015.

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How to Scale Up?

Compliance markets

Science-based Targets

Internal carbon pricing

Offset origination / insetting within

supply chains

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INTERNAL CARBON PRICING: Companies that offset are 5x as likely to

have an internal carbon price

SELECT COMPANIES’ INTERNAL

CARBON PRICES COMPARED TO

EXAMPLE OFFSET AND ALLOWANCE

PRICES

Notes: Internal carbon prices are

based on 120 specific prices

companies reported to CDP in

2014. Voluntary carbon offset

prices are based on Ecosystem

Marketplace’s State of the

Voluntary Carbon Markets 2016

report.

Data source: CDP public

disclosure, reporting year 2015.

Median

internal

carbon price

= $18/tonne

Questions?

Ask on the webinar! Or email:agoldstein@ecosystemmarketplace.com